U.S. Home Prices See 4.3% Annual Increase in Q3 2024, Slowing Amid Rising Mortgage Rates

Key Takeaways for U.S. Real Estate Market Insights
In the third quarter of 2024, average U.S. home prices grew by 4.3% compared to the same period last year, according to the most recent Federal Housing Finance Agency (FHFA) House Price Index (HPI). This represents continued growth, though at a more moderated pace, as the market grapples with high mortgage rates and persistently low housing inventory.

Quarter-over-quarter, home prices edged up by 0.7% from the second quarter to the third quarter of 2024, and the FHFA’s seasonally adjusted index for September also rose 0.7% from August. Despite this upward trend, the rate of appreciation has been tapering off, mirroring market conditions that emerged in late 2023.

Evolving Real Estate Market Conditions
“House price gains are still occurring, but the pace has slowed compared to late last year,” said FHFA experts. The recent moderation can be attributed to steep property values and higher mortgage interest rates, which have put additional pressure on buyer affordability. Even so, ongoing buyer demand, fueled in part by limited for-sale inventory, continues to keep home values on an upward trajectory.

State-by-State and Metro Area Highlights

• Nationwide Growth Since 2012: U.S. home values have registered positive annual appreciation every quarter since early 2012, underscoring a consistently strong housing market over the long term.

• Top States for Year-Over-Year Price Gains: Between Q3 2023 and Q3 2024, home prices increased in 49 states. Hawaii led the pack with a 10.4% jump, followed by Delaware (8.5%), Rhode Island (8.4%), Connecticut (8.2%), and New Jersey (8.1%). In contrast, property values dipped in the District of Columbia (-3.1%) and Louisiana (-0.4%).

• Strong Metro Markets: Out of the 100 largest metropolitan areas, 91 saw home prices climb over the past four quarters. Miami-Miami Beach-Kendall, Florida, topped the list at 10.8% annual appreciation. At the other end of the spectrum, North Port-Sarasota-Bradenton, Florida, recorded a 6.4% decline.

• Regional Trends: All nine U.S. census divisions posted positive annual house price changes. The East North Central division experienced the most robust growth, up 6.8% year-over-year, while the West South Central division saw a more modest increase of 1.6%.

About the FHFA House Price Index
The FHFA HPI is one of the most trusted and comprehensive home value measurement tools, drawing from an extensive database covering all 50 states and more than 400 U.S. cities. Its dataset, stretching back to the mid-1970s, incorporates tens of millions of property sales. This breadth of information allows for a detailed analysis of home price movements at multiple geographic levels, including national, regional, state, metro area, county, and ZIP code.

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